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North Mill EF Closes Its Largest Securitization at $236.6MM

March 22, 2021, 07:23 AM
Filed Under: Industry News

North Mill Equipment Finance LLC announced the closing of its fourth commercial equipment backed securitization (ABS), NMEF Funding 2021-A (NMEF 2021-A). The $236,588,000 ABS issuance was well received by institutional investors, evidenced by strong oversubscription levels across all tranches of notes.

NMEF 2021-A raised capital from a total of 23 investors, representing enhanced diversification relative to the 10 total investors in North Mill’s previous issuance (NMEF 2019-A). North Mill retained eight out of the 10 investors in NMEF 2019-A and brought in 15 first-time investors in the North Mill shelf.

NMEF 2021-A featured five tranches of notes, achieving an ~86.0 percent advance rate through the Class D note. The transaction featured North Mill’s first-ever money-market tranche (2a7 eligible), which, coupled with strong investor appetite, facilitated North Mill in decreasing its all-in cost of funds by ~140 bps relative to its prior issuance. The $236.6 million transaction was backed by $275 million in equipment loan and lease contracts, $45 million of which will be contributed via a three-month prefunding period post-close.
“This transaction is a veritable game changer and clearly demonstrates the confidence the market has in the ability of North Mill to originate and service a portfolio of quality small-ticket loans and leases.  It will have a resounding impact on our profitability this year and beyond,” said North Mill’s President Mark Bonanno. “None of this would have been possible without the dedication, passion, and hard work from the team at North Mill.”

Truist Securities, Inc. and Deutsche Bank Securities served as joint book-runners for the transaction.  The notes were rated by Kroll Bond Rating Agency (KBRA).

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